The United States Commodity Futures Trading Commission (CFTC)’s Technology Advisory Committee held a public meeting MakerDAO and two other stable coins to better understand the industry.
According to reports, MakerDAO, as well as, JPM Coin, and Paxos attended the meeting to discuss different aspects of stablecoins. Although, the meeting covered other aspects like cryptocurrency insurance, custody practices, and cybersecurity.
Firstly, in trying to shed more light on the definition of stablecoin a statement from the CFTC spoke about the definition of stablecoins. A post explained that they’re commonly thought of as a class of virtual currencies that seek to offer price stability against another asset, by being backed by that asset in reserve, like fiat currency(ies) or certain physical commodities like precious metals.
“Although the definition of a stablecoin remains evolving,” a post said.
Besides, Steven Becker, President, and COO of the MakerDAO Foundation provided an overview of the current state of decentralized finance or DeFi. He also gave some of the benefits and misconceptions associated with decentralized protocols. As well as MakerDAO’s Dai stablecoin.
Other stablecoins in the meeting
Charles Cascarilla, CEO and Co-Founder of Paxos also spoke on two of Paxos’ current stablecoin projects. These include the Paxos Standard, or PAX, a digital dollar, backed 1:1 with the U.S. dollar. As well as, PAX Gold, a digital dollar backed by gold.
Additionally, Eddie Wen, Global Head of Digital Markets, spoke on the JPM Coin that’s currently under development. JPM Coin follows a design to make it a digital representation of the U.S. dollars held in designated accounts at JP Morgan Chase. They’re beneficial for instantaneous transfers on the blockchain between institutional JPM clients.
After the discussion, Tomasso Mancini-Griffoli, Deputy Division Chief in the Monetary and Capital Markets Department of the IMF underlined some public policies to be implemented with stablecoins. These policies included financial stability, monetary policy control, privacy, competition, efficiency, consumer protection, and financial integrity.
Maker is a smart contract platform on the Ethereum chain. The platform backs and stabilizes the value of stablecoin DAI through a dynamic system of Collateralized Debt Positions (CDP). As well as, autonomous feedback mechanisms, and appropriately incentivized external actors.
Notably, the MKR tokens get generated or eliminated in accordance with price fluctuations of the DAI coin in order to keep the token as close to $1 USD as possible. It’s also part of a fully inspectable system on the Ethereum blockchain.
Additionally, MKR tokens get used to pay transaction fees on the Maker system and provides holders with voting rights within Maker’s continuous approval voting system.
To remind, recent reports revealed that the old MakerDAO system possessed collateralized debt positions (CDP) locked in.